Beyond Air Financial Results for the Quarter Ended September 30, 2026 - BEYOND AIR INC

Good afternoon, everyone, and welcome to the Beyond Air Financial Results Call for the quarter ended September 30, 2026. At this time, participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. And now, I would like to turn the call over to Corey Davis, LifeSci Advisors. Please go ahead. Thank you, Operator. Good afternoon everyone, and thank you for joining us. Earlier today, we issued a press release announcing the operational highlights and financial results for Beyond Air's quarter ended September 30th, 2026. A copy of this press release can be found on our website, beyondair.net, under the news and events section. Before we begin, I'd like to remind everyone that we will be making comments and various remarks about future expectations, plans, and prospects, which constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Beyondair cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated. We encourage everyone to review the company's filings with the Securities and Exchange Commission, including without limitation the company�s most recent Form 10-Q and Form 10K, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements. Additionally, this conference call is being recorded and will be available for audio rebroadcast on our website, beyondair.net. Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, November 11, 2026, Beyond Air undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this call. With that, I'll turn it over to Robert Goodman, Chief Executive Officer of Beyond Air. Bob, go ahead. The floor is yours. Thanks, Corey, and good afternoon, everyone. I'm pleased to speak with you today and provide an update on what has been a productive and meaningful period for Beyond Air with me today is Dan Moorhead, our Chinese Chief Financial Officer. I'll begin with an update on our recent activities in commercial execution for OneFit PH before turning the call over to Dan to discuss our financial results for the quarter ended September 30th, 2026. We'll then open the call for questions. Throughout the third quarter, we continued to focus on positioning the company for its next phase of growth. As we prepare for the planned commercial launch of our second generation OneFit PH system pending FDA approval, our priorities remain focused on expanding market penetration, deepening relationships with hospitals and health systems, and growing our commercial pipeline while building on the momentum of our first-generation LungFit PH system. These efforts contributed to record quarterly revenue of $2.3 million in the September quarter, up approximately 28% year-over-year and 31% from the June quarter. We achieved this growth while maintaining financial discipline and prioritizing resources to support commercial execution and preparations for the potential launch of second-generation LungFit pH. Underlying these results is the progress we are making in expanding market penetration and converting hospital interest into signed customer agreements that support recurring revenue over multiple years. Our in-house sales team is building these relationships supported by national GPO agreements that broaden our reach across hospitals and hospital systems. Our U.S. commercial pipeline is expanding, reflecting accelerated demand for a first-generation system and strong receptivity to our technology and operational efficiencies it offers. We are especially pleased with the pace of new account wins and the rate of renewals, which speak to the acceptance of our innovative technology and delivery of INO, resulting in exceptional customer satisfaction which gives us a foundation to build on as we prepare for the potential launch of the second generation LungFit pH. International distribution is another important opportunity for growth. We have partnerships in place covering more than 40 countries and international sales during the quarter were one of the highest to date. Looking ahead, pending FDA approval, We believe our second-generation system has the potential to substantially expand our market opportunity and accelerate growth. The system is smaller, has reduced weight, simplified operation, longer service intervals, and expanded operational flexibility. Our PMA supplement seeks expanded FDA labeling that would permit use during patient transport by air and ground. Turning to the regulatory process, our PMA supplement for the second-generation lump-fit pH remains under FDA review. We remain encouraged by the progress we are making toward completing the remaining steps of the review process. We expect to complete our audit readiness process in mid-December. The system would then remain subject to FDA inspections and final approval. The timing and outcome of these steps remain subject to the FDA's review. We are excited to be at these final steps of the process. As I mentioned a minute ago, the second-generation LungFit adds transport capability. This is important as it will enable us to serve as a single-source nitric oxide provider across routine care and patient transport, which is the current standard across most U.S. hospital systems. This will strengthen our competitive position and support broader adoption of our cylinder-free technology. Turning to another development program within our LungFit platform, Lungfit Go received FDA Breakthrough Device designation during the quarter for the treatment of non-tuberculosis mycobacterial pulmonary disease, or NTMPD. We believe this designation underscores a significant unmet need to NTMPD and builds upon clinical data generated with LungFit Go in this patient population. While we are encouraged by this designation, we do not currently plan to allocate resources to further development of Lung Fit Go in 2027. Our focus remains on commercial execution for Lungfit PH and preparations for the launch of our second generation system, pending FDA approval. Let me now provide a brief update on our two indirect subsidiaries focused on development programs outside of our core LungFit business. During the September quarter, we entered into a definitive agreement under which Univoe Pharmaceutical Industries would acquire our controlling interest in Neuronos Israel. The transaction is intended to provide Neuronos with dedicated resources, funding, and strategic focus to advance its development programs. In terms of Beyond Cancer, we're evaluating potential development partnerships and other strategic arrangements to support continued advancements of its pipeline, while maintaining Beyond Air's focus and resource allocation on the commercialization of LungFit pH. Before turning the call over to Dan, I want to emphasize how encouraged we are by the progress we're making with the current Lung Fit pH offering and the foundation we are strengthening for the potential launch of our second-generation system, pending FDA approval. With this progress, we are reaffirming our revenue guidance of $8 million for calendar year 2026, which excludes revenue from the second-generation system. We are also reaffIRMing our revenue guidelines of $16 to $18 million for the calendar year of 2027, which includes anticipated revenue from second- generation system pending FDA approval. With that, I'll turn the call over to Dan for review of our financial results. Dan? Thanks, Bob, and good afternoon, everyone. Let me take this time to walk through our financial results for the quarter ended September 30, 2026. Revenue for the quarter was $2.3 million, compared with $1.8 million for the same period last year. This represents growth of approximately 28% year-over-year and 31% from the June 2026 quarter. Gross margin for the quarter was approximately 8% compared with negative 16 for the same period last year. Gross profit was $200,000 compared with the gross loss of $300,000 in the prior year quarter. Research and development expenses were 1.6 million dollars compared with 2.5 million for the same period last year. The decrease was primarily attributed to lower costs related to the second-generation lung fit pH, as the majority of the development is complete. Selling general and administrative expenses were $4.6 million, compared with $4,9 million for the same-period last year, the decrease was attributed primarily to lower stock-based compensation costs, partially offset by increased salaries in our sales organization as we build out our commercial team. Other expense for the three months ended September 30th, 2026 was $2.2 million, as compared to other expense of $600,000 for the free month ended September 20th, 2020. The increase in expense was attributed primarily to an increase in interest expense and a charge for scrap materials. Net loss attributed to common stockholders of Beyond Air for the three-month ended September 30th, 2026 was $7.8 million or a loss of $3.76 per basic and diluted share compared with a net loss of 7.9 million or loss of 24.98 cents per basic and diluted share for the three months ended September 30th, 2025. As of September 30, 2026, we reported cash, cash equivalents, restricted cash, and marketable securities of $18.5 million, which includes $2.7 million of cash held by Neuronauts, which is shown within current assets held for sale on the balance sheet, and also includes $700 thousand dollars held by Beyond Cancer. This total also includes 4.8 million dollars of restricted cash. As a reminder, we are transitioning our fiscal year-end from March 31st to December 31st, effective December 31, 2026. We expect to report results for the nine-month transition period ending December 31, 2026, on a form 10-K-T. The revenue guidance Bob discussed is on a calendar year basis. With that, we will now open a call for questions. Thank you. And at this time, we'll begin with the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we pull for questions. And your first question comes from Yale Jen with Laidlaw and Company. Please state your question. Great. Thanks for taking the questions. Just two. The first one is that in terms of the FDA review, given that you are doing, they are on the go, you will finish the audit readiness by mid-December. and was there any other things that the FDA may look for or simply just an inspection and then they will make decisions and have a follow-up yeah it's it's pretty much just that Yale the audit will follow right after we announce our readiness and as you mentioned in the middle of December and nothing that we know of that would be in addition to that so just a standard standard audit and feedback okay just giving the time and giving the holidays to come presumably would that be the best scenario FDA make hopefully positive decisions maybe in the first quarter maybe even in the early first quarter of next year? Yeah, I mean, that's up to the FDA, as you know, right? But yeah, we're expecting to have a quick response. We've been communicating with them directly with all of our paperwork, a couple of questions back and forth. We're in great shape there. It's now just the audit part. And the good news is the audit, it's a quick audit. It used to be an up to five-day period but because a lot of it is done you know via paperwork back and forth for a couple of days the the actual audits only like a day and a half long and so once that happens we expect to to hear back from them within a within a few weeks and then there's just a signature process so yeah to your point in your timeline that's right around what we're pointing at okay so maybe lastly that your 16 to 18 million guidance for next year presumably is based on this assumption or do you and just would you anticipate any possible so the push out and if that happens with that impact on the guidance and thanks yeah no so yeah we're sticking with our 16 to 2018, and that includes Gen 2 only in the second, third, and fourth quarter. So we do not have in our guidance Gen 2 revenue in that first quarter. So we're not expecting to push anything out. And, yeah, in fact, our pipeline has grown really, really dramatically over the last couple of quarters. So, we've had a really nice increase with our Gen 1 pipeline as well as our new wins there. So, you know, we have – and we've been planning on that. So, that's where our coverage has been along the way. And, yeah, no, we're not expecting to be pushing anything out, at least at this point, of course. So, basically, we built up some cushion in that in your guidance. Yeah, yeah. Yeah, we built that just to – as we mentioned that a few months ago is that we didn't want to expect revenue on day one, Q1, but we know the pipeline will be able to still from one quarter, Q4 to Q1 with our real strong Gen 1. So we have Gen 2 coming in, like I said, Q2, 3, and 4. Okay, great. Thanks a lot. Let's get back to the Q. Yeah, you got it. Your next question comes from Frank Takian with Lake Street Capital Market. Please state your question. Great. Thanks for taking the questions. I was hoping to follow up on your comments, Bob, about some of the record pipeline that you're referencing. I'm curious if you can put any numbers around that, whether that be kind of percent up year over year, quarter over quarter, number of units in backlog. Just help us understand just how significant that pipeline is right now and when that could start to convert. Thanks. Yeah, sure. So the so our pipeline from Q1 of this year, it's it's grown close to fourfold. All right. We actually it's more than doubled in the US. But what we had done is, you know, we did a real sanitation from the legacy team with respect to just some old deals and cleaned up a little bit of pipeline, put a littlebit more rigor and definition into our pipeline. So we had grown that, or so we had taken it down, and then we built it up a bit, but we've now more than doubled it since then. And so, yeah, we're at a nice inflection point with respect to the growth there. Was there another part of that question? What was that? Just thoughts around when that could start to translate to revenue. Yeah, so we're already starting to see that, you know, translation. In fact, you know, we have, you know, the range for, you know, next year, as mentioned for, the 16 to 18 million, and we have our range within Q1 based off of some of the recent wins we have right now and as far as our pipeline build, you know, we're really bullish around how these, you know, deals are going to be converting, you know, in the quarter we're in now and next quarter, we don't have those yet and we can't, you know, obviously share, but But, yeah, there's a – you know, our win rate is growing. It's increasing. And, yeah. We're expecting to have that conversion reflected. So, yeah it's a nice bump up because there's couple of aspects or reasons for that. Not just the increase in the pipeline, but the fact of the matter is there's less competitors in the field right now. So we're expecting just based off of that to have a higher win rate. Got it. Very helpful. I was hoping to shift over to Gen 2. Once that is through the approval process, how should we think about what is required to get on formulary with the GPOs? I assume the Gen 1 doesn't suffice and you'll have to do some sort of amendment to include the Gen 2, but maybe any clarifying commentary around that would be helpful. Thanks. Yeah, that's just a quick update with the GPOs. They're really used to doing this, so it's really just an extension of what we have. It's nominal as far as time and effort, and then it's just a matter of, and really that's it. It's a pretty simple process. Okay, fair enough. And then just last one from me, and apologies in advance. This is splitting hairs a little bit. I think in the last conference called Calendar Q2 conference call, we were talking a fair bit about the audit readiness process. And at least at that point in time, it seemed like it was kind of a near-term event that that was going to be complete in a few months. And it feels like that maybe took a little bit longer than anticipated. Any additional color related to maybe what happened there and why that might have taken a little bit longer? Yeah, it's not necessarily that it took longer. You know, there's a lot of rigor that's involved with this. You have the install qualification aspects of a build of a product to the operational qualifications, building up to the performance and the process readiness. We didn't underestimate anything. In fact, we, if anything, We knew where we'd be, and it would be in this part of the second half of the year, and we were expecting it to be right around where we're at now. But no, nothing was slowed down or anything like that. Everything actually was just we did a lot of repeatability testing and a lot more stability testing. We wanted to make sure that all of our testing was tight. and so no nothing no no surprise let's put it that way yeah okay great thanks taking questions yeah yeah you got it just a reminder to the audience to ask a question press star 1 on your phone to remove yourself from the queue press star 2 your next question comes from Mike King with Rodman and Renshaw please take your question. Hey guys, thanks for taking the question. I also want to drill down a little bit more on this FDA review process. Bob, we met with you and Dan a couple of weeks ago. We were discussing the necessity for, you know, FDA to get comfortable that the units could be, you know, used in ambulances and on the helicopters and that kind of thing. I mean, this sounds, Is that still part of it, or is there something new that's arisen, or is this all part of the same process that you're going through with the auditing? Yeah, nothing's new. That was part of our PMA supplement paperwork build as well as our testing. So we did a lot of testing on altitude testing. So we worked all of that. Actually, months ago, that was partof this process, and that's all been, you know, documented in part of our paperwork. So that's actually all behind us, and this audit part is really just, you know, the back end of the high-level assembly assessments and audit. But that's also done. We're completely done with that, and we're really happy with, you know, how that all worked out. So we're past all that. And are there any personnel limitations or other aspects of the device division at FDA that are making turnaround times longer than you would anticipate? I don't think so. You know, I mean, what I do know is on the speed side, it's something that's, you know, going to bode well for us is that our R&D facility is an hour and a half away from our contract manufacturer. So what ends up happening when you get into the audit phase, you Know, often, you Now, for a situation like this, when you're dealing with a medical device, you could have a research and development, you Know, division that's in California. but the contract manufacturer could be in Massachusetts. And then you have to deal with two different audit teams in order to manage that, or it could be an overseas and U.S. location. We're an hour and a half away from each. So this is actually going to, if anything, speed up the audit process because it will be one team. And, again, that day-and-a-half process could, you know, it really is something that works well for us. Okay. And then just real quick on the win rate side, can you just talk about what's responsible, what's driving that? Is it the GPO partnerships, the hospitals are better understanding of the device, and maybe you can talk a little bit about the win rates? Yeah. I mean, our technology has been really well received, and that's what is the ease of use with respect to, you know, our product is just really well-received. So our customers are really happy with that. They're really happy with how easy it is to use. And that's helping us with win rates because as you start growing your customer base, and remember, we just started putting this product out a few years ago, the first generation product. The first year, there was a few sites that were using the product. And now we have dozens and dozens of hospitals with that many more sites. So we have a couple of hundred units that are out there that are being used. and we have so many more referenceable, you know, customers that are out there that are speaking on our behalf and that's really helping because people are saying, hey, listen, it's not just that this is a real innovative product. It's actually really easy to use on top of being innovative. You know, as you know this is – this is drug that's being delivered through a medical device that we're creating out of thin air and well that's all well and good But if you're not doing that easily for the customer, all that is is really kind of a catchy phrase, and we're able to kind of win on both ends there. And that, you know, reflects and goes right to the customer. And the customer sees that, and that's what's helping our win rates because, you Know, as we're getting into conversations with, you know, hospital systems that might be across the city or across the state or might be a respiratory therapist that knows somebody in that hospital, you know, across the country, they're calling each other. and they're hearing really good things about us, and that's why we're winning. So, yeah, it's pretty good stuff. Gotcha. Also, can you say, I don't know if it's, you know, revenue is still kind of small, so I don'T know if IT's really relevant right now, but can you SAY anything about sort of your average ticket size? Is your average sale increasing, or is it more unit volume that is, you KNOW, driving the revenues? Thank you. Yeah, so it's two things. It's the volume, and it's the international business. that's driving our revenue up right now um our our average deal size is about the same you know and i could say roughly it's right around the 250 000 is the average deal sized uh when we have these deals anywhere from you know whatever 30 000 to north of a million and can go way higher than that uh and now we're working on a number of larger deals but the net of it is our average deal size about 250 we do know when we have our next generation product we're going to be competing for much larger deals which will definitely increase our overall deal size so our average deal size will be bumping up you know way up from from the 250 our international business is really helping as well as far as you know revenue because that that is immediate recognized revenues you know we're where we get direct sales internationally we get direct sales also in the VA system where we've had a couple of you know recent wins there as well and that that drops you know right to the revenue line they are different than of course as you know the US business which is you know subscription model so but uh but yeah that's that's a net of it thank you taking the questions yeah you got it thank you and we have reached the end of the question-and-answer session I will We'll now turn the call over to Robert Goodman for closing remarks. All right. I want to thank everybody for joining the call today, for all your support and all your interest, and look forward to speaking with everybody next quarter. Have a great night. Thank you. Thank you, all parties, but now disconnect.